Developer Harry Macklowe is picking up the fight against Carol Cohen, a broker at Brown Harris Stevens, over her rent-stabilized apartment at 737 Park Avenue. Macklowe, who is converting the Upper East Side rental tower to luxury condominiums, has filed a lawsuit demanding state regulators review Cohen’s tax filings to ensure she qualifies for the regulated unit.
A Macklowe-affiliated entity, 737 Park Avenue Acquisition, asked a New York State Supreme Court judge to review an earlier decision by the New York State Department of Homes and Community Renewal, after it refused to investigate tax fraud allegations against Cohen.
A DHCR spokesperson, who asked not to be identified, said the agency’s office of rent administration “does not investigate tax fraud” and declined to comment on pending litigation.
Cohen was not immediately available, and her attorney declined to comment.
The claims are similar to those made by the building’s previous owners, the Katz family, who alleged in 2010 that Cohen hid her personal income on her 2007 and 2008 tax returns to avoid paying market-rate rent.
Along with her husband, Cohen paid about $3,060 per month for a two-bedroom at 737 Park, between East 71st and East 72nd Streets, according to court records. At the time, Cohen was at the Corcoran Group, working with top producer Deborah Grubman, and racking up multi-million deals. She left the firm after the allegations surfaced, as The Real Deal reported.
However, in December, a state appeals court upheld a ruling siding with Cohen. A lower court had dismissed the case in October 2011, finding the landlord failed to provide enough evidence to back up its claims.
But Macklowe, who purchased 737 Park in 2011 with private equity firm CIM Group, has been aggressively pursuing tenants who allegedly fail to comply with rent regulation laws.
In a suit filed March 28, Macklowe claimed that Cohen and her husband, Lester, had been making more than $175,000 per year — at the time, the cap for tenants in rent-stabilized units with regulated rents of more than $2,000 per year.
Cohen and Grubman had reportedly sold $134 million in real estate in 2008, the developer noted in court papers, and brokers typically earn commissions of 1 percent to 6 percent, though that is often divvied up.
Cohen also sued Corcoran for defamation in December 2011, claiming the firm refused to let her take her contact list when she departed, and seeking $3 million in damages.
Macklowe pointed to the suit as evidence of Cohen’s higher income.
A spokesperson for the New York State Department of Taxation and Finance declined to comment on pending litigation. Spokespersons for Macklowe and Corcoran also declined to comment.
The suit marks the latest bit of tenant litigation by Macklowe, as he moves forward with the conversion.
Earlier this year he filed – and quickly withdrew – a suit against Elizabeth Murray, a tenant he claimed was running an illegal bed and breakfast out of her apartment. Murray’s lawyer, Robin LoGuidice, has vehemently denied the allegations.
He has also sued the Katz family, claiming they failed to disclose issues with some of the tenants’ leases that have made it more difficult to clear residents out of the building.